Zacks_Analysts' Blog : Novatel Gains Momentum - Analyst Blog

The MiFi line of products, the industry’s first Intelligent Mobile Hotspot, is getting increasing market traction. This product has been developed by Novatel Wireless Inc (NVTL), a leading provider of wireless data access cards and embedded solutions.

Yesterday, Novatel entered into an agreement with Moblix to sell MiFi products in Central & Eastern Europe and the Middle East using Moblix’s reseller channel. 3G mobile broadband networks are being increasingly deployed in these regions by several telecom carriers.

MiFi is an ultra-portable wireless device, creating an environment of high-speed internet connectivity that can be easily shared by multiple users using up to five Wi-Fi devices. Novatel has developed MiFi for both EV-DO and HSPA standards and has also begun shipment to Verizon Wireless (VZ) and Telefonica SA (TEF). Another major U.S. carrier, Sprint-Nextel (S) has also announced a deal with Novatel to launch MiFi.

According to our assessment, diversification into this unique product line gives Novatel a comparative advantage over Sierra Wireless (SWIR) and Kyocera Corp. (KYO) in its traditional mobile data access card market. This is particularly important as several large telecom equipment makers like Qualcomm (QCOM), L.M. Ericsson (ERIC), and Huawei Technologies have entered the mobile computing market with advance chipsets that combine broadband modem technology compatible with high-speed 3G networks.

Novatel has decided to develop an open platform ecosystem based on MiFi technology for applications and services delivery. The company is working with Alcatel-Lucent (ALU) to integrate its Nonstop Laptop Guardian platform on the HSPA version of MiFi.

Novatel is also commercializing the first phase of its own content delivery portal supported by the MiFi platform. MiFi devices will contain onboard this intelligent server application. This development will include portals providing customized content.

Novatel will generate recurring revenue by selling mobile content to its carrier customers. We reiterate our Buy recommendation for Novatel.